Besson Street development in New Cross

We are developing a site on Besson Street in New Cross to build:

• 324 new homes

• improvements to the public realm

• a NHS GP surgery and pharmacy

• community facilities for the New Cross Gate Trust.

The site is brownfield and has been lying derelict for the last 10 years.

Why we are developing affordable homes

One in every two families who approaches us for housing has been made homeless because their private tenancy has ended. We do not currently have enough social homes to offer everyone in this position, so we want to make sure that there are good, secure and affordable private tenancies available to help people in this position.

Problems with private renting

In the Lewisham borough, one in three people live in a household that rents from a private landlord.

While many private landlords are excellent, not all are. Renting privately can be a bad and stressful experience. Tenancies often last for six months, not for life as is the case with social renting. Rents can be increased by however much the landlord wants, and if the tenant doesn’t like it there is nothing they can do except leave, or be asked to leave.

Our main priority is to create more housing at social rent. However, we also want to improve standards for private renters.

Improving private renting

We want to build a development at Besson Street that showcases what a good private landlord can deliver, and gives tenants a much better deal. We will be offering:

• ten-year residencies, through five year renewable tenancies that are 10 times better than the standard in the market

• controlled rents, which can only increase by a pre-agreed amount linked to inflation.

At the Besson Street development, 35% of homes will be affordable, with rents linked to local incomes.

Creating homes for low-income households

These are not council homes and they are not aimed at people who qualify for council homes. Instead they are aimed at residents who:

• earn low to average incomes

• are priced out of home ownership

• have no realistic prospect of getting a council home.

Generating income

As a private development, this project will provide us with a long-term, sustainable and reliable income stream. This income will help us to:

• manage our budgets

• provide essential services

• make less cuts to services because of government funding cuts

• contribute to the delivery of more affordable homes

Setting a standard for our residents

This crucial project is part of our wider housing strategy, which also includes the biggest social housebuilding programme the borough has seen in 20 years, and will set a standard for a wider group of our residents.

We decided to pursue this approach in 2017, and now that the partnership arrangements are in place to start working on our plans, the joint project is underway.

What is being planned

We will build up to 324 new homes for rent. Of these:

• 35% (114) will be genuinely affordable, based on the London Living Rent calculation where rents are set based on average incomes in the Telegraph Hill ward, meaning homes will always be affordable

• 65% will be let at market rent level.

The development will also include:

• a new fully-fitted out GP surgery and health centre for New Cross

• a pharmacy

• a community space for the New Cross Gate Trust

• commercial space for shops

• high-quality public space, including an outdoor gym.

Why we are working with a developer

Grainger plc is one of the country’s largest professional landlords. We chose them because they are an award-winning organisation that wants to:

• develop long-term, stable housing in the private rented sector

• offer mid-market private rents aimed at ordinary people.

The partnership with Grainger plc will create a new social-minded commercial landlord that will set a new standard of private renting in the borough. All tenants will be offered:

• residency periods of at least 10 years (an initial five-year tenancy with an automatic right to renew for another five years)

• rent increases that are fixed at the time of sign-up, and linked to inflation, meaning renters know in advance what rent they will pay in the future

• no agent fees – renters will deal with their landlord directly

• secure contracts with no break clauses or fees on the landlord’s part

• a very high standard of housing management and additional services including 24/7 responsive repairs, pet-friendly options and the opportunity to customise their home.

Our partnership with Grainger plc will not push market rents higher in the area. Instead, we will deliver better value for money by providing much better services at mid-market rent levels. We hope this will have a stabilising effect on the local private rented sector.

The benefits of the scheme

Besson Street is one of a number of strategies we are using to respond to the housing crisis challenge we face. It’s specifically focussed on how we can sponsor an improved private rented sector that works for working residents on ordinary incomes, with better rent levels and greater security of tenure.

The scheme will:

• provide high-quality new homes for rent for people on ordinary incomes in the borough

• create new places, including community facilities, open spaces, shops and leisure facilities

• provide longer-term tenancies to give greater stability to renters

• provide a high-quality property management and maintenance service

• cap rent increases in line with inflation to provide certainty for renters

• provide properties which are let at a London Living Rent linked to local incomes

• attract institutional investment into the borough at a time of financial challenges

• generate an ongoing income that we will be use to provide services for residents.

It complements our other strategies which include: 

• building new social homes that will be let on secure tenancies at social rents to residents in housing need

• supporting alternative models of community-led developments, such as the self-building community land trust (CLT) at Church Grove in Ladywell and the CLT scheme at Brasted Close in Sydenham

• building on the success of PLACE/Ladywell to use innovative new construction techniques to quickly build new developments that will provide new permanent homes for homeless families.

How our partnership with Grainger plc works

The partnership with Grainger is on a 50/50 basis. This means decisions can only be made when both parties agree.

We will make all decisions relating to the Besson Street partnership through our normal decision making bodies, such as Mayor and Cabinet meetings, where democratically elected councillors and the mayor will decide on what actions should be taken.

The partnership with Grainger plc has been set up so that we can never lose control over the Besson Street site. Dispute resolution mechanisms have been built into the legal agreements between Grainger plc and the Council. These will come into effect if any disagreements arise.

The partnership would only dissolve if these mechanisms fail. If this happens, ownership of the Besson Street site would revert back to us and any development costs would be split 50/50 with Grainger plc. This approach protects the Council and the Besson Street site.